Why open source is becoming a strategic imperative for Indian startups

As AI and software stacks grow complex, Indian startups are moving from using open source to actively contributing, seeing collaboration as a strategic business advantage

Rapid growth across India’s startup ecosystem has long been fuelled by global open-source technology. However, the sector is now at an inflexion point. As artificial intelligence (AI) and software frameworks grow more complex, companies are shifting from passive reliance to active collaboration, making open-source contribution a strategic necessity. 

Companies as varied as sport tech platform Dream11, fintech Juspay and ride-hailing app Namma Yatri are open-sourcing different components, driven by ecosystem-level considerations. Open source software is code designed to be publicly accessible, allowing anyone to inspect, modify and distribute it as they see fit. It reduces development costs, speeds up iteration and enables companies to embed their engineers in global problem-solving communities — benefits that no single organisation can replicate by itself. 

Several startups last year publicly committed to open source, including doing so with their proprietary software as they fund development of key projects.  

Juspay put its payments routing engine on open source as part of an initiative called Hyperswitch. Dream11’s open-source initiative, Dream Horizon, put parts of its core technology stack in open source. Stock broking platform Zerodha has set up a million-dollar annual fund to support open-source projects globally. Fintech firm PhonePe has open source projects for security, AI agentic frameworks and other work.  

By making the source code publicly accessible, open-source projects empower a global community of engineers to collaboratively refine, secure and expand the software’s capabilities. By facilitating the sharing of fixes and features, open source eliminates redundant work and allows developers to overcome common hurdles using collective intelligence. 

“The cost of using a proprietary alternative can expand costs by multiples of what you end up using through open source. The real value of the open-source system is that the more you contribute back to it the richer all of us become,” said Venkatesh Hariharan, the India representative of Open Invention Network (OIN), which protects open-source software from patent risks. 

Indian companies are opening up parts of their proprietary software because they have matured and can contribute to the collaborative practice in return. Dedicated technical teams can focus on open-source initiatives, gather feedback from projects, and collaborate globally, without being constrained by competitive or revenue pressures, according to a startup founder. 

While some technology stacks remain proprietary, many are open for community feedback and benefit from a steady stream of contributions from their original creators. 

“There will be critical systems which may not get open-sourced but systems are large things and built on multiple layers. The lower down the layer you can open source, the broader the impact will be,” said Santanu Sinha, chief architect, PhonePe. 

The Bengaluru-based fintech has developed Sentinel AI, a Java-based framework for deploying AI agents across various (LLMs) and tools. 

Data from GitHub, a code-hosting and collaboration platform, shows that metrics such as issues closed, pull requests merged, and code pushes hit record highs globally last year. The platform in March recorded 255,000 first-time open-source contributors — the single largest monthly tally in its history. India has 21.9 million developers on GitHub. 

Opening up software enables companies to reach a global market that would otherwise be inaccessible via closed models, particularly for businesses outside the big tech circle. 

Vimal Kumar, founder and chief executive officer of Juspay, explained how open source helps fintechs. “Open source for us is where people can contribute and use it themselves and we can run it as a Cloud service because not everybody who takes it up wants to run it themselves. They will need some commercial support, generally at an enterprise level,” he said. 

Companies that put their technology stacks on open-source can get “10 times more customers”. 

“There are customers who come and tell us if they want something particular which might be missing in the product. We learn from them and are able to do more. People can try our software and when they get used to it and become serious and larger, they can opt for commercial support,” Kumar said. 

India is among the leaders in open source contributions and it ranks second in AI contributions internationally, said Karan M V, director of international developer relations at GitHub.  

“In 2025, six of the 10 fastest-growing repositories were AI infrastructure projects, highlighting the global demand for runtimes, orchestration and efficiency tools,” he said. 

Open source collaborations are accelerating even as many developers still navigate the learning curve for deploying agentic workflows.  

“AI, especially agentic AI, helps shorten this learning curve drastically by helping developers understand the nuances of the project, and the expectations for contribution better and faster. What we’re seeing now is AI accelerating growth in India’s open source community, and the activity on our platform reflects that,” Karan added.  

Despite the learning curve challenge, there are open source LLMs such as Meta’s Llama, which allow Indian developers to innovate on top of these models.  

“India is the biggest talent hub but there are dependencies on Western technologies. When it comes to open source and AI, China and the US still dominate and it becomes important to disconnect strategically,” said Rachit Gupta, founder of BharatAI Mission.  

“In the next five to six years, what could happen is that open-source LLMs will be the dominant paradigm and proprietary LLMs might start slowly fading away. This is similar to what happened two decades back with proprietary operating systems,” said OIN’s Venkatesh. 

Kumar, Juspay’s leader, said AI coupled with open source can improve productivity significantly. “When an issue is filed, we can do automated root cause analysis, and AI can suggest some solutions. There’s a lot of augmentation in creation and the amount of work we can do can go from 2x to 10x,” he said. 

AI-generated software code might create some “noise” in the system but that can be tackled using the same tech to verify such code, said Santanu of PhonePe. 

“Large project maintainers can get a lot of noisy pull requests which can be a problem. There will be a bunch of initial work that project maintainers will have to do to build validation systems,” he added.  

While India’s developer ecosystem is flourishing, it requires sustained investment and more robust collaborative frameworks in open-source initiatives. The country may see more startups join the open-source cause.